Copro-holdings Co., Ltd. · TSE:7059
Copro-holdings — FY2020 Earnings Presentation
46 slides from Copro-holdings's earnings presentation, May 28, 2020
Slide 1: Fiscal year ended March 2020 Results of Operations
Fiscal year ended March 2020 Results of Operations May 28, 2020 (Thu) COPRO-HOLDINGS Co., Ltd. Tokyo Mothers / Nagoya Centrex (Code: 7059)
Slide 2: Contents
Contents 1. 2020/3 Results of Operations 2. 2021/3 Forecast 3. Strategy for Steady Growth 4. Corporate Profile 2020 1
Slide 3: 1. 2020/3 Results of Operations
1. 2020/3 Results of Operations 2020 2
Slide 4: Sales and Earnings
Sales and Earnings Net Sales Earnings (Million yen) (Million yen) 14,000 13,122 1,800 1,592 1,585 12,000 1,600 10,819 1,344 1,336 1,400 10,000 1,200 1,084 8,000 1,000 938 6,000 800 600 4,000 400 2,000 200 0 0 2019/3 2020/3 '19/3 '20/3 '19/3 '20/3 '19/3 '20/3 Up 21.3% Operating profit Up 18.4% Ordina
Slide 5: FY3/20 Highlights
FY3/20 Highlights 1. Record-high sales and earnings at all levels COVID-19 had almost no effect on sales and earnings 2. A larger base of operations by opening four offices (Tokyo Plant Branch, Nagoya Plant Branch, Osaka Plant Branch, Takamatsu Branch) Increase in people on assignments, progress wit
Slide 6: Summary Statement of Income
Summary Statement of Income (Million yen) Change Change 2019/3 2020/3 (Amount) (%) Net sales 10,819 13,122 +2,303 +21.3 Cost of sales 7,194 8,746 +1,552 +21.6 Sales-cost ratio (%) 66.5 66.7 +0.2pt Gross profit 3,624 4,376 +751 +20.7 Sales-gross profit ratio (%) 33.5 33.3 -0.2pt SG and A expenses 2,2
Slide 7: Sales Composition (1)
Sales Composition (1) Reliance on Japan’s Big Five Temporary Staffing by Industry General Contractors (Million yen) 13,122 (Million yen) 13,122 14,000 14,000 364 Others +10.1% 12,000 10,819 12,000 10,819 1,135 331 1,883 CAD +7.7% 10,000 10,000 1,054 1,080 8,000 8,000 3,263 Plants +74.3% 2,707 6,000
Slide 8: Sales Composition (2)
Sales Composition (2) Sales by Region (Million yen) 13,122 14,000 Sales outside 10,819 YoY Tokyo/Nagoya/Osaka area 12,000 Other regions of Japan +23.2% 10,000 8,000 28.6% 6,000 YoY Tokyo/Nagoya/Osaka +20.6% 4,000 area 2,000 0 2019/3 2020/3 Well-balanced growth as sales in regions of Japan other than
Slide 9: Quarterly Sales
Quarterly Sales Consistent Sales Growth (only a minor impact of COVID-19) (Million yen) 3,573 3,500 3,376 3,149 3,023 3,000 2,920 2,824 2,616 2,457 2,500 2,000 1,500 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2019/3 2020/3 2020 8
Slide 10: Growth of Engineering Workforce and Utilization Rate
Growth of Engineering Workforce and Utilization Rate Steady growth in the number of engineers Number of engineers (end of FY) Engineer utilization rate Retention rate* (Engineers) (%) 98.0 98.1 2,500 100 75.9 74.8 SDGs Target 2,000 80 Up to 82.0% 7.2 points 1,500 60 Goal is raising the 1,000 1,984 4
Slide 11: Number of Engineers Hired
Number of Engineers Hired Engineers hired (Engineers) 800 1,063 Experience of Newly Hired Engineers 350 2020/3 300 287 279 Other 23 New graduate 257 240 250 215 203 204 Plants CAD 200 178 40 56 95 150 Facilities 103 100 Public works 508 50 96 Inexperienced 0 142 1Ｑ 2Ｑ 3Ｑ 4Ｑ 1Ｑ 2Ｑ 3Ｑ 4Ｑ Construction
Slide 12: Retention Rate and Utilization Rate
Retention Rate and Utilization Rate Retention Rate Utilization Rate （％） （％） 80 100 97.7 98.0 98.1 98.1 75.0 74.7 74.8 75 73.7 95 70 90 65 85 60 80 1Ｑ 2Ｑ 3Ｑ 4Ｑ 1Ｑ 2Ｑ 3Ｑ 4Ｑ 2020/3 2020/3 ＊ Retention rate = Number of engineers (end of FY) / (number of engineers of previous FY + number of engineers hire
Slide 13: Compliance with Japan's Equal Pay for Equal Work Requirement
Compliance with Japan’s Equal Pay for Equal Work Requirement Status at beginning of 2021/3 (vs. end of Jan. ’20) Effect on sales Effect on expenses Higher staffing service rates Higher cost of sales (increase in sales per engineer on assignment) <Per month> < Per month > 24.5million yen 21.0million
Slide 14: Fees Charged per Individual Placed
Fees Charged per Individual Placed Benefits of negotiations for higher fees emerged in the second half of 2020/3 (Thousand yen) 650 600 550 500 450 １Ｑ ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ ３Ｑ ４Ｑ Pct. of all engineers 2019/3 2020/3 (End of 2020/3) 6 ~ years 592 595 602 604 614 617 631 635 15% 3-5 years 557 563 570 569 568
Slide 15: Summary Balance Sheet
Summary Balance Sheet (Million yen) End of Composition End of Composition Change 2019/03 (％) 2020/03 (％) Cash and deposits 4,761 63.7 4,831 60.2 +70 Accounts receivable - trade 1,526 20.4 1,856 23.1 +330 Sales growth Other 199 2.7 210 2.6 +10 Current assets 6,486 86.8 6,897 85.9 +411 Property, plant
Slide 16: 2. 2021/3 Forecast
2. 2021/3 Forecast 2020 15
Slide 17: 2021/3 Forecast
2021/3 Forecast Assumes COVID-19 will affect performance during the first half Net sales (LHS) Operating profit (RHS) (Million yen) (Million yen) 20,000 2,000 2020/3 2021/3 18,000 1,670 (Forecast) 1,592 16,000 1,500 Net sales 13,122 15,398 14,000 YoY +21.3％ +17.3％ 12,000 10,000 1,000 Operating profi
Slide 18: Forecast Highlights
Forecast Highlights Use business climate changes to build a base for medium/long-term growth 1. Responses to working style reforms (limit on extended working hours) • A larger volume of work no longer results in higher sales per employee • Raising fees to reflect the high quality of COPRO engineers;
Slide 19: Effects of COVID-19 (1)
Effects of COVID-19 (1) Current effects Effects at workplaces (teleworking, standby at home, etc. *As of May 12) Engineers as of April 30: 2,074 Teleworking, etc. Compensation Projects People Percentage Full salary 159 222 10.7% 178 projects, No compensation 3 3 0.1% 253 people (12.2%) Not decided,
Slide 20: Effects of COVID-19 (2) Employee safety and support measures
Effects of COVID-19 (2) Employee safety and support measures COPRO sends real-time information to the smartphones of all employees • Established a COVID-19 Response Committee for information sharing and extensive countermeasures • Distributed 50 masks to each employee and 25 masks to newly hired peo
Slide 21: Dividend Policy
Dividend Policy To increase the dividend payout ratio while maintaining the proper balance between dividend payments and investments for future growth. (Yen) （%） 28.7 70 35 60 30 50 25 20.2 2 26.1 50 40 20 30 18.5 40 15 20 40 10 30 10 20 20 5 Interim dividend 2018/3 0 2019/3 0 2020/3 20 2021/3見込 20
Slide 22: After-Hours Sale of COPRO Shares
After-Hours Sale of COPRO Shares After-Hours Sale Planned for May 28-June 1, 2020 (Announced May 20) 1. Number of shares: 166,100 2. Planned date: May 28 to June 1, 2020 3. Price: Based on closing (or indicated) price on May 27 4. Limit on purchases: 200 shares per buyer (units of 100 shares) 5. Exc
Slide 23: Restricted Share-based Remuneration Plan
Restricted Share-based Remuneration Plan Summary and purpose The purpose of the plan is to link the compensation of directors (excluding outside directors) with results of operations and shareholder value, thereby giving these directors a greater incentive to contribute to COPRO’s growth. → This pla
Slide 24: For more information about this presentation
For more information about this presentation COPRO-HOLDINGS Co., Ltd. Administration Department Telephone: 0120-253-066 (toll free) Internet: Please submit the question form at the following URL https://www.copro-h.co.jp/contact/ 2020 23
Slide 25: 3. Strategy for Steady Growth
3. Strategy for Steady Growth 2020 24
Slide 26: Long-term Vision
Long-term Vision Long-term Vision Our goal is to be the preeminent engineer staffing services group and an organization that customers and engineers always choose over others. The industry’s leading brand Key goals Preserve and reinforce competitive superiority Outstanding retention rate + Even stro
Slide 27: Strategic Goals
Strategic Goals 1 Full-scale start of the overseas 2 Actions for increasing the engineer retention rate 3 Growth while contributing to a sustainable society 2020 26
Slide 28: Growth Strategies (1) Overseas Project
Growth Strategies (1) Overseas Project Overseas Project (1) Growth outside Japan ● Established a subsidiary in Singapore (April 2020) COPRO HOLDINGS 100% COPRO- COPRO GLOBALS ENGINEERD. Co., PTE. LTD. Ltd. Subsidiary in Singapore Supervises ASEAN region operations Overseas Project (2) Country A Coun
Slide 29: Growth Strategies (2) Higher Retention Rate 1/2
Growth Strategies (2) Higher Retention Rate 1/2 Increase measures to attract and retain engineers Established a department for COPRO Mileage Club retention (April 2019~) (April 2020~) Deals with problems and needs of ●Started our own bonus point system temporary staffing workforce engineers ●Employe
Slide 30: Growth Strategies (2) Higher Retention Rate 2/2
Growth Strategies (2) Higher Retention Rate 2/2 Upgrade of the Gen-Kyari recruiting website, including AI for a higher matching success ratio Website upgrade schedule June 2020 August November January 2021 February~ Design Development (Started AI in Sept.) Verification (Tests) Reception Full-scale o
Slide 31: Growth Strategies (3) Contribute to a Sustainable Society 1/2
Growth Strategies (3) Contribute to a Sustainable Society 1/2 Create jobs for seniors (support for lifetime employment) Senior Employment Age of the Temporary Placement Stabilization Act Engineer Workforce The aim of this law is to (March 31, 2020) enable seniors to continue working for as long as t
Slide 32: Growth Strategies (3) Contribute to a Sustainable Society 2/2
Growth Strategies (3) Contribute to a Sustainable Society 2/2 COPRO Group Activities for SDGs (Targets) Target KPI 2020/3 2023/3 Target KPI 2020/3 2023/3 Quality Industry education Higher utilization innovation & infrastructure rate of training 100.0% Higher 82.0% for people with 54.6% retention rat
Slide 33: Infrastructure to Support Growth Strategies
Infrastructure to Support Growth Strategies Progress as planned with the new core system Schedule April 2020 June November January 2021 April 2021~ Basic plan Development/Testing Data transfer/Training Trial operation Full-scale operation Definitions were finished in 2019 ⇒ Currently creating the ba
Slide 34: Goal for Growth during the Next Decade
Goal for Growth during the Next Decade (Billion yen) 100 Step up activities for Net sales Overseas growth outside Japan 100bn yen New fields M&A and other activities Operating profit to enter new fields 10bn yen Plant industry Build a brand that customers and Construction engineers both choose indus
Slide 35: 4. Corporate Profile
4. Corporate Profile 2020 34
Slide 36: Corporate Profile
Corporate Profile Kosuke Kiyokawa Name COPRO-HOLDINGS Co., Ltd. President and representative director Representative Kosuke Kiyokawa 3-28-12 Meieki Nakamura-ku, City Head office of Nagoya, Aichi prefecture Established October 2006 Fiscal year end March Temporary staffing and permanent Mr. Kiyokawa w
Slide 37: Business Operations (1)
Business Operations (1) Temporary staffing for engineers mainly in the construction industry Provider of temporary staffing services Engineers Client companies 2020 36
Slide 38: Business Operations (2)
Business Operations (2) Positioned between supervisors and tradespeople for overseeing construction ●Jobsite supervision Primary tasks ●By full-time employees of Supervisors Construction project (Construction company general contractors personnel) management Construction 1) Process management ●By th
Slide 39: Branch Network
Branch Network Sapporo Branch Osaka Plant Branch Western 20 Branches Sapporo Br. East Japan Japan Nation Wide Osaka #1 Branch Sendai Branch Osaka #2 Branch Kanazawa Br. Nagoya Head Office社 Seed of Supervisor Nagoya #1 Br. Sendai Br. Nagota Plant Br. Omiya Br. Osaka #1 Br. Chiba Br. SE Sapporo Buildi
Slide 40: Recent Sales and Operating Profit
Recent Sales and Operating Profit Sales and earnings have been increasing steadily. Net sales (LHS) Operating profit (RHS) (Million yen) (Million yen) 14,000 13,122 2,000 12,000 10,819 1,500 10,000 1,592 8,962 8,000 7,701 1,344 1,000 6,000 909 894 4,000 500 2,000 0 0 2017/3 2018/3 2019/3 2020/3 2020
Slide 41: Sales by Industry
Sales by Industry Plant 14.4% Construction 85.6% Net sales: 1.88bn yen Net sales: 11.23bn yen <Up 74% yoy> <Up 15% yoy> Others 2.8% Construction CAD 31.9% 8.6% Civil Facilities engineering 24.9% 17.4% As of 2020/3 2020 40
Slide 42: The Three Strengths that Define COPRO
The Three Strengths that Define COPRO Engineers always come first Operations from the standpoint of the approx. 2,000 temporary staffing engineers １ ２ ３ A nationwide network A well-structured Mobility and for engineer workforce training program for technological skills for client industry MOBILITY M
Slide 43: Strength (1) A nationwide network for engineer workforce
Strength (1) A nationwide network for engineer workforce MOBILITY workforce (about 2,000) Nationwide engineer throughout Japan Client companies A highly mobile Information about a workforce broad spectrum of covering all regions (= many people can go to a labor needs An office network project anywhe
Slide 44: Strength (2) Technical skills created by education
Strength (2) TECHNICAL SKILLS created by education utilizes our distinctive know-how Focus on the construction industry with skills covering many construction categories Construction management and design CAD operators for building, civil support for highways, shoreline engineering, facility and fac
Slide 45: Strength (3) Mobility and technological skills for client industry
Strength (3) Mobility and technological skills for client industry EXPANSION Using experience and accomplishments in the construction industry to expand operations to the industrial plant industry Construction Industrial plants (Core business domain) (A new business domain) Construction management a
Slide 46: Disclaimer and Precautions about Forward-looking Statements
Disclaimer and Precautions about Forward-looking Statements This presentation was prepared by COPRO-HOLDINGS for the purpose of giving investors an understanding of the company’s current operations and goals. The information in this presentation is based on economic, social and other conditions